SuperValu (SVU) will be closing 60 of its underperforming grocery stores, the company revealed on Wednesday after the market close.
The name SuperValu may be less familiar to you, but the company runs several supermarket chains you probably have shopped at, including Albertsons, Shop 'n Save, and Save-A-Lot.
SuperValu's network spans 4,400 stores, so 60 may not seem like a lot. However, the move will result in some serious near-term accounting pain in exchange for some serious long-term gain. SuperValu will take a mostly non-cash pre-tax charge of $80 million to $90 million in closing down the stores, with most of the locations shutting down within the next three months.
Will it be enough? The company has been profitable in recent quarters, even though it lost the faith of income investors with the July decision to nix its quarterly payouts. At least closing the underperforming stores -- while painful for those who will be displaced -- is a move that makes fiscal sense.
Other Things Worth Watching
• H&R Block (HRB) is giving its bean counters their quarterly workout. The tax preparer posted a charge-adjusted loss of $0.38 a share on a 4% dip in revenue on Wednesday night. This may not seem all that heartening, but it was actually a narrower deficit than the market was expecting. H&R Block runs on a very seasonal basis, and red ink is natural this time of year.
• Amazon.com (AMZN) is hosting a press conference in California on Thursday morning. By now it's a foregone conclusion that the leading online retailer will unveil its new line of Kindle Fire tablets. Amazon was bragging about the current model being sold out last week, and potential buyers haven't been able to buy them on backorder ever since. The market has evolved quite a bit since Amazon introduced the original Android-fueled device for $199 in November of last year. Expect plenty of upgrades, but don't look for a price increase. The line in the sand appears to be drawn below $200 for entry-level tablets.
Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of SuperValu and Amazon.com. Motley Fool newsletter services have recommended buying shares of Amazon.com and buying calls on SuperValu.